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John Suthers Colulmn January 03, 2009

The legally flawed 'Nebraska Compromise’

Editor’s note: At least 13 state attorneys general from around the country are examining the legality of the so-called “Nebraska Compromise,” which helped win passage of the health care reform bill in the U.S. Senate. Colorado Attorney General John Suthers is among them. Because no legislation has won final passage so far, no legal action can be filed, as yet. In this column, Suthers explains his reasoning for joining with the other attorneys general to look at the Nebraska provision.

From the moment health care reform emerged as the issue of Congress’ 2009 agenda,

Republicans and Democrats have exchanged rhetorical volleys and parliamentary maneuvers aimed at passing, slowing or halting passage of a bill. It’s not my job as Colorado attorney general to immerse myself in the merits of the health care debate. But in an effort to secure 60 votes to pass a health care overhaul, the U.S. Senate has crossed a line that should trouble Coloradans on both sides of the political divide.

The Senate bill, which must be reconciled with the House’s take on health care reform, contains provisions that would dramatically expand Medicaid eligibility throughout the country and the amount various states must contribute to the expanded program. Colorado, for example, is likely to have to come up with an additional $1 billion over the next six years to fund the Medicaid expansion.

To secure the 60th vote needed to pass a bill, Senate Majority Leader Harry Reid inserted a provision in the bill that effectively exempts Nebraska from any additional burden and requires that the other 49 states absorb the cost of covering any new Nebraska Medicaid recipients.

The bill thus acquired the support of Sen. Ben Nelson and, in the eyes of several state attorneys general, including me, a significant legal problem.

The U.S. Constitution and related case law prohibit Congress from arbitrarily funding or taxing the states differently. Any differences must have a rational basis. It is our opinion that the Nebraska Compromise has no rational basis. This sort of congressional action is not an expenditure promoting the general welfare of the United States. It is quite the opposite: an expenditure for the benefit of one state, to the detriment of all others.

The Nebraska Medicaid amendment is substantially different from any other earmark in this or any other bill. Instead of being a one-time expense for a hospital expansion, highway resurfacing or other project, Nebraska is securing a perpetual benefit whose cost taxpayers in every other state must bear.

To be sure, there can be rational taxing or funding discrepancies between the states. For example, the residents of one state might be poorer than Coloradans and thus qualify for more federal entitlements. That is an acceptable discrepancy. However, when one state is singled out for a benefit — being perpetually exempt from paying for any new Medicaid patients — for no other reason than securing a vote, it does not pass the smell test.

I have received dozens of calls and e-mails from Coloradans applauding me for my decision to explore the constitutionality of the Nebraska arrangement. The vast majority of these callers said they support me because they do not like the president’s health care overhaul. My objections, however, have nothing to do with the merits of the Senate bill or the politics of Washington, D.C. My concerns are purely legal.

This is a matter of the U.S. Constitution and protecting Colorado and Colorado taxpayers’ interests on the national stage.

Colorado’s senators and congressional representatives should insist on removing the Nebraska Compromise from the bill as lawmakers reconcile the House and Senate proposals. In the meantime, several of my colleagues and I plan to continue to study this provision and our legal options.